How Your Culture Is Guaranteeing Weak Performance

Written by Michele Clay & Mark Kamin

The current paradigm for organizations guarantees weak performance. (And you are either blind to it or perpetuating it.)

The current paradigm for business is to maximize shareholder return. This is an obvious consequence of the need for investors to receive a fair return on their capital.

This paradigm was best and most prominently articulated by economist and former Federal Reserve Chairman, Milton Friedman, when he was a professor at the University of Chicago in 1970. In an interview with the NY Times, he said:

“There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits…”

In other words, in the current paradigm, organizations exist only to get shareholders maximum return on their investment.

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